THE MEDIA BUSINESS: ADVERTISING

THE MEDIA BUSINESS: ADVERTISING; 3 Ad Competitors Unite to Conquer

Published: March 8, 2002

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Bcom3 had planned a stock offering in 2001 so it could have publicly traded shares that could be used as currency to make deals and help Bcom3 grow. But after the dot-com collapse and the stock market's difficulties, Bcom3 executives decided against issuing stock.

That decision has continued to loom as an obstacle into 2002, hobbling Bcom3 as bigger competitors with publicly traded stock -- ike Interpublic, Omnicom, Publicis and WPP -- kept making deals. Shares of Publicis closed 12 percent higher yesterday in Paris, at 38.79 euros ($34.23), as investors seemed to give approval to the acquisition.

''The question of our long-term future was something always on my mind, with the goal of going forward to become a public company,'' Roger A. Haupt, chairman and chief executive at Bcom3, said in an interview.

More recently, however, after ''talking with Dentsu for a long time about where do we go,'' he added, ''it became a question of what was best for our company, our clients and our people.''

Mr. Haupt, 54, will take the new post of president and chief operating officer at Publicis. He said the deal ''could bring together America, Europe and Asia in a different way than other agency companies could, providing the best service for our clients while protecting, nurturing and developing our culture.''

''It's a fairly logical deal with a pretty logical fit,'' said David McMurry, advertising analyst at Credit Suisse First Boston in New York.

''Publicis will still be a pretty far cry from the Big Three,'' he added, ''but it will have four global advertising networks, which no one else in the industry has.'' His reference was to the agencies that the merged Publicis will operate under the Burnett, D'Arcy, Publicis and Saatchi & Saatchi names. Interpublic and Omnicom each have three global networks; while WPP has four, though its fourth, Red Cell, is relatively small.

Publicis ''will be a big player in a lot of big places,'' said Mr. Russell, at Morgan Stanley. ''The size is impressive and the geographic reach is impressive, as are the agency brands.''

''This puts an awful lot of pressure on the rest of the agency companies that are not part of the Big Three or soon-to-be Big Four,'' he added, like the Cordiant Communications Group in London, the Grey Global Group in New York and Havas Advertising in Paris.

Mr. Russell offered one caveat to the deal, that ''there has to be a cultural match'' between the Bcom3 and Publicis executives for it to succeed. That can be tricky when top managers come from different countries with different ways of doing business.

Mr. Lévy, who turned 60 last week, knows that well. For years he had a joint venture with True North Communications in Chicago, but escalating arguments between him and Bruce Mason, chief executive at True North, led to a bitter dissolution of the partnership and a failed takeover attempt by Publicis that True North repelled. Not long after that, True North was acquired by Interpublic.

''I'm going back to Chicago,'' Mr. Lévy said, laughing, when reminded of the True North fracas, ''and as we say in French, 'by the main door.' ''